Ultrasound Market Trends & Analysis

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When in the market to buy or sell ultrasound equipment, awareness of market trends and purchasing considerations is essential. OpenMarkets’ latest broadcast featured a roundtable discussion to assist in understanding the ultrasound market and highlighted new research on the capital purchasing process, ultrasound market overview and analysis, and insight into the supplier community’s landscape.

During the roundtable, Tom Derrick, OpenMarkets’ Co-founder and Senior Vice President, was joined by the following experts:

To gather data on the capital procurement and decision-making processes, OpenMarkets worked with Pathstone Partners to craft a large quantitative survey on how and why ultrasounds are procured. The survey dove deep into the capital planning process, the departments that lead negotiations for clinical equipment, and the percent of annual capital tied to contracts. With 240 respondents including administration, clinical, supply chain and finance officials, the analysis of the data found interesting patterns.

The data revealed that most health systems typically start planning 6 months in advance of the fiscal year, while smaller health systems can wait until 3 months or less.

“Sales cycles spike around the end of June and again at the end of December, which we assume is aligned with the fiscal year of many of our customers,” says De Bour.

Suppliers tend to reach out to health systems far in advance of the fiscal year because there are so many people involved in the purchasing of equipment. The survey found there is about a 50/50 split between supply chain/finance and service line managers/clinical leadership for which departments were primarily leading negotiations for clinical equipment. Although, the survey revealed that the single department in front of all others is the supply chain department.

From OpenMarkets’ observations, contracting from a capital perspective is very fragmented, so the survey included related questions. The answers revealed that 46% of the total annual capital spend is tied to GPO contracts, while 30% are tied to local contracts, and 24% are not tied to any contracts.

For details about suppliers and products in the ultrasound market, OpenMarkets referenced Signify Research, which has found that the ultrasound market consists of 57 manufacturers, 270 unique models, and accounts for $1.4 billion of the $30 billion spent on healthcare equipment overall. Yet, the ultrasound market is projected to experience more growth in 2018 due to several factors:

• Rising prevalence of diseases

• Value-based reimbursement leading to a decrease in use of CT’s and increase in use of ultrasounds

• Increased awareness regarding radiation dose

• Compact systems increasing efficiencies

• Use of the ultrasound imaging technique by non-radiologists

• Uncertainty over the Affordable Care Act repeal is easing, which is leading to pent up demand

Delving deeper into the categories of ultrasound equipment and their prevalence in the OpenMarket community, Derrick explained how OpenMarket treats and classifies equipment types. First, they are broken into two main categories: Traditional/Premium and emerging Point of Care (P.O.C.). Traditional/premium ultrasound equipment includes multi-modality use ultrasounds, which accounts for 74% of the products and transactions in the community, while P.O.C. equipment accounts for 11%. Mindray’s expected a higher P.O.C. percentage. He stated, “Point of care is growing more rapidly than any other segment in the marketplace. I would think it would be at 30% or more.” Toth of Konica-Minolta added, “More P.O.C. units are purchased/sold, because it is not a replacement market. P.O.C. are new units going into the market as we see more procedures requiring ultrasounds, like needle guidance and rehabilitation.”

P.O.C. ultrasound equipment use is growing very rapidly for several reasons including the lower price point, as well as the increase in procedures that require P.O.C. ultrasound equipment. In addition, the technology is experiencing incredible innovation like connection to smart devices and hospital electronic medical records, as well as units are smaller and lighter than previous equipment. Every P.O.C. device is a connected device with few exceptions, so features are included to allow healthcare organizations to build IT security and data privacy measures.

The ongoing OpenMarkets Healthcare Supply Chain Broadcast Series educates healthcare providers and equipment suppliers on new processes and intelligence to save valuable time, better collaborate with customers, and maximize efficiency. Check back soon for the next broadcast.

Tom leads a range of core functions for OpenMarkets, including strategic partnerships and marketing. Prior to OpenMarkets, Tom served as a senior communications director for... More about Tom Derrick